IP-Oh! Kayak and Palo Alto surge in debut

Kayak enjoyed a strong debut in its initial public offering -- proof that Facebook's troubled deal didn't kill demand for new stocks.

So much for Facebook (FB) nailing the IPO window shut. Palo Alto Networks (PANW) shot up more than 30% in its debut on the NYSE Friday morning. And Morgan Stanley (MS) was one of the underwriters!

Online travel site Kayak (KYAK) finally debuted Friday -- it was in the pipeline for years. Shares shot up nearly 30% -- and Morgan Stanley was also one of its underwriters. What's more, Kayak is listed on Nasdaq!

On Thursday, Five Below (FIVE) showed that maybe it deserves the FB ticker. The discount retailer catering to teens surged 55%. And late last month, cloud computing company ServiceNow (NOW) gained more than 30% on its first day of trading. Shares have held steady since then.

All this shows that talk of the initial public offering market being broken in the wake of Facebook is a bit misguided. Sure, Facebook's botched deal exposed many cracks in the system. Morgan Stanley arguably pushed to sell too many shares at too high a price. And the Nasdaq (NDAQ) clearly was not ready to handle the deluge of orders that accompanied the most widely-anticipated IPO since Google (GOOG).

Still, the fate of any IPO is always subject to what's going on in the broader markets and economy. For some firms, going public doesn't make sense now. Guitar maker Fender was expected to sell stock this week. But on Thursday, the company went acoustic, pulling the plug on its IPO. The company cited the turmoil in Europe as a challenge.

But companies with an interesting story -- and not too much hype -- can still go public and do reasonably well. Five Below, for example, is profitable and posted a sales increase of more than 50% in its most recent fiscal year. Palo Alto, which competes with Cisco Systems (CSCO) and Juniper Networks (JNPR) in the network security market, reported that revenues more than doubled in the first nine months of this fiscal year. It also eked out a small net profit.

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And before Facebook's mid-May debacle, companies ranging from organic mac & cheese maker Annie's (BNNY) to Big Data tech firm Splunk (SPLK) and online reviews site Yelp (YELP) also made a big splash when they went public.

What Facebook taught us is not that it's a mistake to go public. It's a mistake to have the hubris to think that just because you have 900 million users, you can clearly justify a valuation of more than $100 billion -- especially when your growth is already starting to slow.

The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.

Paul R. La Monica is an assistant managing editor at CNNMoney. He is the author of the site's daily column, The Buzz, and also tweets throughout the day about the markets and economy @LaMonicaBuzz. La Monica also oversees the site's economic, markets and technology coverage.